Commission answers questions about charity fundraising and Kids Company

Regulator appears before Public Administration and Constitutional Affairs Select Committee

(PressZoom) - The Chairman of the Charity Commission, William Shawcross and one of its directors today gave evidence to the Public Administration and Constitutional Affairs Committee (PACAC) about fundraising practices in the sector and the commissionís handling of concerns about the former charity Kids Company.

The PACAC session was focused on the self-regulation of charity fundraising, but Mr Shawcross and the commissionís Director of Investigations, Monitoring and Enforcement, Ms Russell, were also asked about the regulatorís engagement with Kids Company.

Mr Shawcross explained that, prior to July 2015, the commission had over recent years received only one substantive complaint about the charity. Concerns were raised with the commission in October 2014 by a donor about Kids Companyís use of their donation, which it assessed carefully, took up with the charity but determined that there were no grounds for regulatory action or further intervention by the commission.

The commission also told the committee that in July 2015 it acted within 24 hours, after specific allegations of financial mismanagement were raised with it for the first time by 3 former employees (see a previous public statement made by the commission).

As a result, the regulator insisted on a number of steps being taken by the trustees; this work was ongoing when the charity closed on 5 August. On 20 August, the commission opened a formal statutory inquiry to continue to investigate and put on the public record whether concerns about the administration, governance and financial management of the charity were true in light of the then increasing number of allegations in the media made about the charityís governance and financial management, and to identify wider lessons for other charities and trustees.

This is in line with the commissionís duty to promote public trust and confidence in charities. The commission says it cannot comment further while the investigation is underway, but will publish a report once it has concluded, to set out its findings and conclusions. Reports of previous commission inquiries are available on GOV.UK.

On the issue of charity fundraising, Mr Shawcross explained its limited role as fundraising activity is self-regulated, and that the recent review by Sir Stuart Etherington recommended that self-regulation should continue, but with some reforms.

Mr Shawcross made clear that the commission does not have the funding or capacity to take on statutory regulation of fundraising. Mr Shawcross stressed that the commissionís relationship with the new regulatory body will need to be clearly defined in order that the public and charities are clear about the respective roles of the new regulatory body and the commission and other regulatory bodies.

The commission is currently reviewing its guidance Charities and fundraising (CC20) to ensure trustees are clear about what the law and the commission as regulator expects of them, which it will consult publicly on in due course.

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PR 66/15

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